Strike vote over performance-based wage plan

Home > Business > Economy

print dictionary print

Strike vote over performance-based wage plan

The Korean Financial Industry Union announced on Saturday it will go on a full-scale strike in September in opposition to the government-led efforts to introduce a performance-based salary system in all financial institutions across the country.

“The culprits of the current crisis in the shipbuilding and shipping industries are cozy connections between the government and leaders of financial institutions,” the union said.

“The incentive-based salary system allows institutions to easily dismiss employees, but it’s not the employees that deserve dismissal, but the Blue House.”

About 2,000 union members gathered at a sports complex in Deungchon-dong, western Seoul to take part in the vote. Senior members including leader Kim Moon-ho demonstrated by shaving their heads to show strong determination for the strike.

Last week, the government started pressuring state-run financial companies to implement performance-based promotion systems after the Korea Development Bank and the Export-Import Bank of Korea, major creditors of debt-ridden shipbuilders and shipping companies, were criticized for contributing to the problem.

“State-run financial institutions must overhaul their own systems to be based on the principle of meritocracy in order to regain the public trust and break away from the public’s image of them as a ‘god’s workplace’,” Yim Jong-yong, chairman of the Financial Services Commission (FSC), at a meeting with heads of nine state-run financial institutions on Wednesday.

As part of the ongoing financial reform initiatives, the financial regulator has been pushing for the implementation of a new salary system at all nine state-run financial institutions under the FSC. Korea Deposit Insurance Corporation and Korea Asset Management Corporation are the only two that have agreed to the FSC plan.

The financial institutions and all public institutions will have to adopt the salary system by June.

Led by the Ministry of Strategy and Finance, the government in January began expanding the system that used to be applied to first-tier and second-tier executives at public institutions to all employees except entry-level staff. Quasi-government agencies are to take part by the end of the year.

A total of 321 state-run companies and quasi-governmental organizations will be subject to the salary system.

The average difference in pay increases between salaries of those who perform well and those who don’t will be 3 percentage points, expanded from the current 2 percentage points, according to a scenario by the Finance Ministry in January.

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)